The DeFi industry is one of the most popular topics in terms of crypto money recently. This popularity also causes the price of DeFi tokens to increase.

PancakeSwap is the last DeFi protocol to make a name for itself after SushiSwap and Uniswap.

PancakeSwap is essentially a DEX (decentralized exchange) based on Binance Smart Chain. Binance Smart Chain has been experiencing its best so far in recent weeks in terms of both user numbers and total value locked. Binance Smart Chain was launched in September 2020, replacing Binance Chain. Since then, Binance’s blockchain has grown significantly and some popular decentralized financial platforms (DeFi) have moved to Binance Smart Chain.

The PancakeSwap exchange does not use order books like traditional exchanges. Instead, it uses an automated market maker (AMM) model that matches buy and sell orders directly to others in a pool of liquidity. These pools are filled with funds from other users. Users can earn trading fees and liquidity provider (LP) tokens by providing liquidity to such a pool. LP tokens are named FLIP tokens to match the pancake. There are different types of these tokens.

How to Use PancakeSwap and CAKE Token?
PancakeSwap makes yield farming simple and fun. To use PancakeSwap, you must first connect your MetaMask browser wallet or WalletConnect. Although MetaMask is an Ethereum wallet, the Binance Smart Chain (BSC) design works in a way that makes decentralized applications (dApps) interoperable with Ethereum wallets such as MetaMask.

The “Exchange” section is used for token swaps, while the “pools” section is where fees are earned for liquidity provision. Finally, the “farming” section is where yield farming happens.

Yield Farming with PancakeSwap
Yield Farming allows users to deposit money in exchange for staking rewards. Rewards can be combined and used in multiple protocols, allowing users to increase yield by tracking the highest interest rates in various parts of the DeFi ecosystem.

Providing Liquidity to PancakeSwap
PancakeSwap liquidity provider (LP) tokens are called “FLIP” tokens. FLIP tokens come in different varieties depending on the token pair provided to a pool. Those who farming on PancakeSwap can lock their LP tokens and earn more rewards in the process. After depositing funds into a PancakeSwap liquidity pool, earning LP rewards and using them to collect Pancake tokens (CAKE), users can lock CAKE tokens to receive SYRUP tokens.

Pancake Token
In September 2020, Pancake token (CAKE) was launched on Binance Smart Chain (BSC). CAKE is a BEP-20 token specific to BSC. The CAKE token performed extremely well in 2021 and experienced an incredible price rally throughout February. CAKE’s primary function is to promote the provision of liquidity to the PancakeSwap platform. Besides, CAKE has no maximum supply, which means it is a deflationary token and tokens are burned regularly to reduce the supply.

As with any other DeFi protocol, PancakeSwap comes with inherent risks. However, the security provided by Binance Smart Chain (BSC) is gratifying for DeFi users. PancakeSwap brings all the functionality of Uniswap to Binance Smart Chain (BSC) for free. Transaction fees are paid using BNB tokens, but these fees are considerably lower compared to Ethereum-based DeFi protocols. DeFi protocols generate an incredible amount of revenue. Moreover, these platforms are quite new. Binance Smart Chain (BSC) is an exciting new platform for DeFi. PancakeSwap is one of many successful projects from BSC.


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